A California resident, Joseph Frank Abel, pleaded guilty in the BitClub Network mining-pool case. The U.S. Department of Justice reports this.
According to investigators, Abel, together with accomplices, managed the BitClub Network mining pool from April 2014 to December 2019. The organizers offered investors to invest in the company’s stock, misleading them with fictitious financial statements.
In Ponzi-scheme fashion, BitClub Network promised rewards for bringing in new participants. Over five years, the perpetrators diverted $722 million in cryptocurrency.
Via video link to a U.S. district judge, Abel said that the BitClub Network organizers had not filed a registration statement for the securities. He admitted involvement in the fraudulent scheme and concealing income for 2017.
The mining-pool organizer faces up to five years in prison and a $250,000 fine. For the tax offense, three years’ imprisonment and a $100,000 fine. The court will hand down a sentence in January 2021.
Earlier, another BitClub Network participant Silviu Catalin Balaci pleaded guilty to selling unregistered securities and pyramid-scheme fraud. In June, Indonesian police arrested another BitClub Network organizer.
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